Chandelier Stop

A Chandelier Stop is a dynamic stop-loss level that moves up as a stock's price rises, helping you lock in gains while protecting against sudden drops. It's calculated by taking the highest price over the last N days, then subtracting a multiple of the stock's volatility (usually measured by ATR, or Average True Range—how much a stock typically swings daily). You'll see traders use it to automatically exit positions if momentum breaks down. For example, if TechCorp hits a new 20-day high but then drops below your Chandelier Stop level, you'd sell automatically. It's popular because it adapts to market conditions—volatile stocks get wider stops, calm ones get tighter ones—so you're not guessing where to bail out.